EUR/USD Tumbles Towards Yearly Low as Daily RSI Goes Oversold

The EUR/USD currency pair has dropped by over 300 pips since the Fed's rate hike, nearing its yearly low set in June at 1.1325.

This drop follows a strong rally of USD-strength over the past three weeks, with the Federal Reserve increasing interest rates to combat inflation and stimulate economic growth.

However, the relationship between bond yields and currency strength is complex, as illustrated by the lack of consistency in their correlation coefficient.

The EUR/USD pair has shown a mean reversion tendency over the past 15 months, with daily RSI readings highlighting inflection points for several swings. The indicator recently entered oversold territory for the first time since June, potentially signaling a reversal in trend.